The analyst blamed the continuing economic malaise for curbing IT budgets, which led to an 8.3%
year-on-year decline in PC shipments during the fourth quarter of 2012.

But there is an underlying theme: PC shipments are in
decline. And the reason for that decline is that they have become the 21st century equivalent
of the dumb terminal from the mainframe era.

IDC's Worldwide Quarter PC Tracker data shows that PC shipments declined 3.7% in 2012. In
2013, it expects shipment to decline by a further 1.3%. In 2014, however, demand for new PCs will
increase slightly, leading to a predicted growth rate of 1.9%.

PCs have become the 21st century equivalent of the dumb
terminal from the mainframe era

No killer app to drive desktop sales

“We still don't see tablets – with their limited local storage and file system, and lesser focus
on traditional productivity – as functional competitors to PCs, but they are winning consumer
dollars through their mobility and consumer appeal nevertheless,"said Loren Loverde, programme
vice-president, worldwide PC trackers, at IDC.

It is not necessarily the popularity of tablets, such as Apple's iPad, that have resulted in the
PC's demise. It has been a long time coming. The PC is not dead, it will remain a useful business
tool, but there is less need for CIOs to equip the majority of business users with the latest
powerful desktop or laptop computer. The killer app that will make everyone go out and buy the
latest PC no longer exists in business.

Dell's poor financial performance is also down to lack of PC sales, which has seen its founder,
Michael Dell, take the unprecedented step of re-privatising
the company. It is believed this will pave the way to a major restructuring out of the public's
eye, possibly culminating in Dell offloading the PC division.

As IDC noted, tablet computers are not personal productivity devices. To use them full-time in a
business context would mean attaching a keyboard, docking station and possibly a large monitor,
which begs the question, why not simply use a PC?

Latest software is not enough

Microsoft’s strategy for tackling the growing popularity of tablets has been to offer Windows 8
as a tablet-optimised operating system (OS). Why buy a tablet and a PC, it argues, when a Windows 8
tablet can work as both? Manufacturers now offer a range of devices, from pure tablets, to hybrid
devices, to ultrathin notebooks with touchscreens, all powered by Windows 8.

In an article for Computer Weekly, Quocirca analyst Clive
Longbottom noted that the majority of enterprise applications in an organisation will have been
written for Windows XP/Vista/7, and will default back to the traditional desktop user interface
(UI) when run on Windows 8. “This is incredibly distracting for users should they then have to use
anything under the modern UI – and switching between them is not that intuitive,” he said.

Apart from the UI issues, many businesses are in the midst of migrating from Windows XP to
Windows 7, before the cut-off date for XP support in April 2014. After this time, Microsoft will no
longer provide security patches for XP, unless businesses buy an expensive custom support contract.
Given that most businesses will have refreshed PCs a few years ago, their desktop and laptop PCs
are capable of running Windows 7, so there is no rush to upgrade.

Desktop virtualisation extends life of hardware

Desktop virtualisation is another factor that is starting to gain traction. Previously, running
Windows desktop applications remotely resulted in a poor user experience, but thin client devices
are now smarter.

Wyse, for instance, which Dell acquired in 2012, sells the D90D7 embedded Windows thin client,
which includes Wyse Device Manager software and is certified for VMware, for $499 (£329). According
to Dell, the device supports rich media and high-definition video applications.

Major PC refreshes are a thing of the past

Eventually, people will migrate to Windows 8, but this is unlikely to stimulate a major PC
refresh, according Dale Vile, an analyst at Freeform Dynamics. “Even if businesses want to move to
the latest Microsoft software, like Office 2013, Windows 8 is more efficient and can prolong the
life of older hardware,” he says.

People used to migrate PCs because they had to, he said, but now they are in control of PC
refresh cycles and many computers in current use are capable of running the latest operating
system.

So, while CIOs may be managing the migration to Windows 7 today, many have no compelling reason
to migrate to newer hardware.

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